TaxPersonal TaxNo end in sight for withholding tax deadlock

No end in sight for withholding tax deadlock

The protracted European dispute over hamonising the taxation of savings took a further blow yesterday when Luxembourg prime minister Jean-Claude Juncker slammed the UK for failing to make progress on the issue.

Speaking to a high-level group of officials in Brussels, Juncker – who is also Luxembourg’s finance minister – cited the UK’s opposition to banking secrecy for the situation.

The problem arose following a 1997 European Union agreement to adopt a co-existence model for taxing savings income. It allowed member states to either levy a withholding tax on income for non-resident savings or exchange information about such income. But, according to the Financial Times, Juncker has claimed ‘the UK did not respect it’.

Chancellor Gordon Brown has also irritated other European finance ministers with a proposal to exchange data between tax authorities which would undermine traditional banking secrecy conventions in Luxembourg and elsewhere.

The UK has insisted the end of banking secrecy has to go together with tax harmonisation, but the prime minister has implied such insistence had distorted the EU’s original goals.

For his part, Juncker does ‘not accept’ that banking secrecy should be abolished in Luxembourg.

Finance ministers are due to debate the savings tax directive on 5 June in Luxembourg but they are not expected to be able to make any progress.

European Union homepage

Related Articles

HMRC appeal rejected in Tottenham Hotspur case

Administration HMRC appeal rejected in Tottenham Hotspur case

2w Emma Smith, Managing Editor
HMRC urged to clarify impact of income allowances on Self-Assessments

Personal Tax HMRC urged to clarify impact of income allowances on Self-Assessments

2m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

2m Emma Rawson, ATT Technical Officer
Wealthy individuals could circumvent top tax rate rises

Personal Tax Wealthy individuals could circumvent top tax rate rises

4m Alia Shoaib, Reporter
Italy grants first successful non-dom status application to former UK non-dom

Personal Tax Italy grants first successful non-dom status application to former UK non-dom

4m Emma Smith, Managing Editor
Industry reaction: Taylor Review does not go far enough in addressing tax issues

Legal Industry reaction: Taylor Review does not go far enough in addressing tax issues

5m Alia Shoaib, Reporter
Does the Taylor Review sufficiently address the gig economy?

Corporate Tax Does the Taylor Review sufficiently address the gig economy?

5m Alia Shoaib, Reporter
HMRC tax evasion assistance requests double in five years

Corporate Tax HMRC tax evasion assistance requests double in five years

5m Emma Smith, Managing Editor